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Customers look at a Chrysler PT Cruisers at a Chrysler dealership listed as losing its franchise, in Redwood City, Calif.
AP Photo

Rural Chrysler car dealerships have taken a disproportionate hit in the bid to keep the bankrupt company afloat, according to a study released Friday by a group devoted to rural issues.

Of the 789 Chrysler dealerships that were forced to close on Tuesday, non-metro and rural areas were hit harder than anywhere else based on a analysis of shuttered dealership locations and census data.

The results of the study, which appeared on the Daily Yonder blog, a website affiliated with the Center for Rural Strategies, found that while 16.5 percent of Americans live in non-metro communities, 32.5 percent of the closings were in these areas. The disparity in rural America was even more pronounced: While just 6.6 percent of the country’s population lives in towns with fewer than 10,000 residents, 19.5 percent — or one-fifth — of the closures occurred in those communities. Though metro areas will see a larger number of dealership closures overall, the population analysis shows that mid-size and small towns bore the brunt.

The findings come on the same day that executives from Chrysler and General Motors, which is also under bankruptcy protection and preparing to shutter hundreds of dealerships across the country, defended the closures in testimony on Capitol Hill. So far, the companies have not offered an explanation about how they picked which franchises to shut down.

“This has been the most difficult business action I’ve ever personally taken,” Chrysler President James Press told a House subcommittee on Friday. “Today’s automotive industry cannot support the number of dealers currently in the marketplace.”

Owners of the doomed dealerships traveled to Washington this week to pressure lawmakers into forcing the companies to reconsider the closures and have been finding a receptive audience.

Sen. Byron Dorgan (D-N.D.) called a hearing last week to question auto executives about the dealership closings. In May, Chrysler informed seven dealerships in his state that they were on the chopping block.

“Many of these dealerships have served the auto companies for 60 or 80 years, only to be given three weeks in the case of Chrysler to sell all of their inventory and parts,” Dorgan said at the hearing. “On top of that, some loyal customers will be forced to travel hours for warranty repairs. I requested this hearing so we can examine the justification for closing these dealerships and make sure dealerships and consumers are treated fairly.”

The Daily Yonder study was conducted using special census designations called Rural-Urban Commuting Area Codes, which are similar to ZIP codes but take population density, urbanization and commuting patterns into account. General Motors has not released a list of the dealerships it plans to close.

Readers' Comments (48)

I saw the car dealers on CSPAN. What really happened is a lot of them were small, low-volume dealers in rural areas that just weren't big enough or profitable enough, and they got downd. Obama's auto task force ordered it and the company managers did it, very ruthlessly.

That's why so many crew-cut Republicans just got the axe, because they didn't bring in enough money to make it worthwhile to keep them, given that the auto market for Chrysler and GM sounds like it's going to be half of what it once was--or less.

In this case, the government argued that while this was a very harsh thing to do, they did it in order not to lose 100% of the jobs and car dealers and suppliers--potentially millions of jobs gone, and a major shock that might just have tanked the whole economy.

According to the bosses of GM and Chrysler, now working for the government, their companies were completely broke. It was the end.

ARE THESE THE STATES THAT VOTED OBAMA? IF SO WE WARNED YOU! YOU HAD TO HAVE A LIBERAL WITH SOCIALIST IDEAS AND NOW HE IS DOING HIS "REDISTRIBUTION OF WEALTH" PROGRAM. HE IS FROM A THIRD WORLD COUNTRY AND HE WANTS US TO BE A THIRD WORLD COUNTRY. HE IS DOING WHAT HE SAID HE WOULD DO!!! DON'T BE SO SURPIRSED BUCK UP!!! GET READY THE WORST IS YET TO COME.....WAIT TIL THOSE TAXES HIT THE MIDDLE CLASS, THEN THEY WILL BECOME BELIEVERS.

Was it rural dealships that were closed or ones who did not support the car president during the election. I remember saying during the election that he sounded like a used car salesman or a snake oil salesman. Bet if we were ever to find out the truth both gm & chrysler dealers that were closed were not hussein supporters.

And it happens.......and it happened b4....what's new? Only thing that might be different is...Some one saying I'm freaking rich! Not Me !!! Why Not the F you? please tell! Same folks u met going up.....Say hello to the same ones going down

And it happens.......and it happened b4....what's new? Only thing that might be different is...Some one saying I'm freaking rich! Not Me !!! Why Not the F you? please tell! Same folks u met going up.....Say hello to the same ones going down

Jun. 12, 2009 - 10:06 PM ESTWas it rural dealships that were closed or ones who did not support the car president during the election. I remember saying during the election that he sounded like a used car salesman or a snake oil salesman. Bet if we were ever to find out the truth both gm & chrysler dealers that were closed were not hussein supporters.Reply

You can't prove how the dealership owners voted. Votes are secret, and it isn't reasonable to pressure somebody to divulge how they voted. Even so, how do you know they're not lying? You don't! So it's stupid to say it's politically motivated. Republican balderdash!

Now that the Obama regime has nationalized much of the American automotive industry and given away a lot of it to the UAW, the Democrats probably decided on which dealerships to close based on the same top two criteria that they usually use:

amount of money that dealer and/or workers had donated to Obama and other Democrats. race and religion of the owners and workers.

You can't prove how the dealership owners voted. Votes are secret, and it isn't reasonable to pressure somebody to divulge how they voted. Even so, how do you know they're not lying? You don't! So it's stupid to say it's politically motivated.

Not the votes.

It's the campaign contribitions.

The current administration knows which dealerships contributed to Republican causes.... this is public information.

Chrysler dealers who donated funds to Republicans were first to be marked for closure.

Okay... Okay. First off, there are far fewer democrats in entrepreneurial positions than republicans... ergo more republican-owned businesses slashed. For the record, the rational that these points were costing the manufacturers a fortune to service is baloney. Most of the rural dealers that I call on haven't seen a manufacturer rep. in years. (In the business fo 40 years) GM, Chrysler and Ford have wanted to out these dealers for decades, not because of costs but because of the aggravation verses profit ratio. A small dealer can gripe just as much as a large one and have the same number of lawyers. I heard some manufacturer spokesman the other day say that the little dealers cost them millions because they didn't sell their market share. Buy that? Think about it. Pontiac sells cars. Oldsmobile sold cars. Chevrolet sells mainly cars. etc. Have you ever tried to pull a trailer filled with heifers with a Corvette? They will miss this market... In the final analysis, the dealers who are left are the ones who will suffer. Manufacturers have already told them about revised capitalization standards etc.

Yes, let's look at campaign contributions and congressional voting patterns. Ask a politician and they will all say there's no connection. I'm all for real campaign finance reform. I'm all for taking the massive amounts of money out of the process. It ain't gonna happen. Look on the right, they say it's free speech (talk about irony). Look at Cheney and how he can go from Halliburton to the White House, next thing you know we are in a war and who is getting huge no-bid contracts? Halliburton. How about speaking to that massive sleazy pile of corruption?

Walpin's office had conducted the investigation of St. HOPE Academy's use of AmeriCorps funds and alleged that Johnson and officials with St. HOPE Academy improperly used some of the $847,673 in federal money received between 2004 and 2007.

The U.S. attorney's office later negotiated a settlement that called for Johnson, St. HOPE and its former executive director, Dana Gonzalez, to repay more than $400,000 in grants.

Walpin opposed the settlement and recently asked Congress to review the case.

Following the initial investigation, U.S. Attorney Larry Brown asked a branch of the FBI that polices the integrity of federal inspectors general to review Walpin's performance. Brown had questioned Walpin's decision to make his investigation public without consulting the U.S. attorney's office.